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I will arrive at a Canadian hotel at Niagara Falls just for one night stay from the US by car. The following day I will drive back into the US.

I will have a regular ESTA. Will I need the ETA for the single night stay or am I ok with the ESTA?

I know that if entering by car ETA is not required, but I'm not sure if this applies also to a night stay.

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You do not need ETA for this trip.

The duration of your intended stay in Canada has no bearing on the ETA requirement.

ESTA is a US program. ESTA has no bearing on the ETA requirement or on entering Canada in general.

ETA is required when you fly into Canada. It doesn't matter whether you're staying for an hour, a night, or a month. Similarly, as you note, it is not required when you cross the land border, regardless of how long you intend to stay.

If you would require ETA to fly into Canada, you are eligible to cross the land border into Canada without ETA.

Further information is available on the Canadian government's page at https://www.canada.ca/en/immigration-refugees-citizenship/services/visit-canada/eta.html.

(People who would be eligible to fly to Canada with ETA will nonetheless be exempt from ETA if they have certain other documents such as a Canadian visa or residence permit, but that's not particularly relevant to land border crossings.)

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    Note that Brazilians are visa-exempt when they fly into Canada and have an eTA (which they can get if they have a US visa or held a Canadian visa in the past 10 years), but are not visa-exempt if they enter by land. – user102008 Dec 27 '19 at 17:44
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An ETA is not required if you drive into Canada, whether you stay overnight or not.

An ETA is required if you are flying into Canada.

Both of the above assumes that you would qualify for ETA entry. If you wouldn't qualify for ETA entry you'd need a Visa.

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